By Raquel White
Central Regional Compliance Manager
Recently, CIFAC received a complaint from an industry partner regarding the Benicia Middle School Seismic Retrofit Upgrades project. The contract valued at $3.7 million included multiple scopes of work for various trade classifications. Although the sheet notes stated that the contractor should hire a preferred contractor for roofing repairs, the District issued an addendum removing roofing repairs from the bid scope. Their intention was to contract directly with the preferred contractor for the roofing work.
Regional Compliance Manager White immediately contacted the District to learn its reason for initially including roof repairs by a preferred contractor and then removing the roof repairs from the bid scope completely. The District explained that the contractor had replaced Benicia Middle School roof coatings back in 2015. As part of the twenty-year warranty, all roof coating repairs must be made by the same contractor, or the warranty would be voided. The roof repairs associated with the seismic upgrade work were anticipated to be less than $10,000 and the District planned to contract with the contractor upon completion of the seismic work. Considering the existing warranty and the repairs due to the seismic upgrades were expected to be less than $10,000, paired with the District being a participating member of the California Uniform Construction Cost Accounting Act (CUCCAA), the District can either; negotiate a contract directly with a contractor, issue a purchase order, or self-perform public projects below $60,000. It was a plausible explanation, but questions lingered.
A discussion with a contractor that bid on the job concluded that the roof coating repairs exceeded $10,000 and appeared to be significant, considering the repairs requested by the District. The District could not provide estimates from the preferred contractor for the roofing repairs because the repairs would occur after the seismic upgrades. Without an estimation, how could the District anticipate the repairs to be less than $10,000? The District explained that a copy of the warranty for the roof coating replacement in 2015 was not readily available for our review but would be provided at a later date.
CIFAC informed the District that the roofing repairs should not have been removed from the bid scope and insisted that the District competitively bid the roof repairs linked to the seismic retrofit upgrades initially included in the bid scope. In an effort to promote a fair and level playing field for all interested contractors and subcontractors, the preferred contractor should complete any subsequent warranty repairs at no cost to the District.
The District complied with CIFAC’s request and competitively bid the roofing repairs estimated at $612,000. Yes, the same roofing repairs that the District anticipated being less than $10,000 were, in-fact, valued at $612,000! A warranty is a written guarantee for a product or service. It holds the maker of the product or service responsible for repairing or replacing a defective product or its parts at no cost to the owner. It is not a way to circumvent the competitive bidding process to contract with a preferred contractor for work outside of a warranty.
CIFAC Regional Compliance Managers are continuously working to create a level playing field and eliminate favoritism in public works construction. Warranty or not, new construction over the threshold must be bid out.